PancakeSwap Sets Date for CAKE Tokenomics 3.0 Despite Controversy

PancakeSwap, the largest decentralized exchange (DEX) on BNB Chain, has officially announced the implementation of CAKE Tokenomics 3.0. This is a significant step towards a more sustainable and deflationary ecosystem.

According to the announcement, PancakeSwap will begin implementing the new tokenomics model on 04/23/2025. The main goal is to curb CAKE inflation, optimize system efficiency, and provide long-term value to the community. However, the CAKE 3.0 proposal has sparked considerable controversy.

What are the key changes in CAKE Tokenomics 3.0?

PancakeSwap has set three main objectives for Tokenomics 3.0: achieving a 4% annual deflation rate, eliminating complex mechanisms like veCAKE, and reducing CAKE issuance to improve sustainability.

Below are the specific changes:

• Stopping CAKE Staking, veCAKE, Gauge Voting, Revenue Sharing, and Farm Boosting: PancakeSwap will cease CAKE staking and the veCAKE mechanism, which required users to lock tokens to gain voting rights or benefits. All locked CAKE and veCAKE will be unlocked.
• Burning mechanism to reduce circulating supply: PancakeSwap will burn tokens to reduce supply instead of sharing transaction fees with users. The team expects to burn around 5.3 million CAKE annually, supporting the deflation goal.
• Phased reduction of CAKE issuance: Daily CAKE issuance will decrease from 29,000 to 20,000, and then to 14,500 tokens.

Users will have six months from 04/23/2025 to withdraw previously locked CAKE.

The Debate on CAKE 3.0

Some developers and community members believe CAKE Tokenomics 3.0 will benefit the project in the long term.

"The core of CAKE Tokenomics 3.0 is protecting real value and CAKE holders by strengthening long-term fundamentals—such as significantly reducing issuance to accelerate deflation and develop sustainable value," Chef Philip said.

However, not everyone agrees. Cakepie DAO—one of the largest veCAKE holders—expressed strong concerns on X. They criticized the decision to remove veCAKE, calling it non-transparent and potentially harmful to projects built around that model.

This reveals the division in the community about how PancakeSwap balances deflation and stakeholder interests.

"Stopping veCAKE will be a disaster for Cakepie and for every project built on long-term alignment with PancakeSwap. Our entire ecosystem is structured around veCAKE, with millions of CAKE locked for four years as a clear commitment. Removing veCAKE will overnight erase that commitment and undermine the trust and efforts of all builders who believed in PancakeSwap's vision," Cakepie stated.

In response, PancakeSwap proposed a compensation package worth 1.5 million USD in CAKE tokens. They suggested this for CKP (Cakepie's token) holders if Cakepie agrees to allow a 1:1 conversion from mCAKE (Cakepie's CAKE derivative) to CAKE.

However, Cakepie is currently voting on whether to accept this proposal.

At the time of writing, CAKE is trading around $1.97, up 17% since 04/08, when PancakeSwap first proposed Tokenomics 3.0.

Additionally, data from defillama shows PancakeSwap's 24-hour trading volume has exceeded $1 billion, surpassing Uniswap.

Meanwhile, a report from BeInCrypto reveals that PancakeSwap controls over 90% of the DEX market share on BNB Chain. This emphasizes the strong relationship between BNB Chain and PancakeSwap.